Prairie State Energy Campus

Prairie State Energy Campus is a proposed coal plant, to be built in Lively Grove, Illinois. The plant will be located approximately 45 miles south east of the greater St. Louis area. Coal for the plant would come from the proposed Lively Grove Mine in Illinois. The proposed Jordan Grove mine in Illinois would serve as a secondary site to store combustion coal waste from the Prairie State Energy Campus, as Peabody has a permit for a coal waste site in southeast St. Clair County, Illinois.

The air permit for the plant has been the subject of a long struggle. The Illinois EPA issued a PSD air permit in 2005, which was subsequently appealed. In August 2006, the U.S. EPA Environmental Appeals Board upheld the permit. In October 2006, the Sierra Club, the American Lung Association, and the American Bottom Conservancy challenged the air permit for the plant in a petition to the U.S. 7th Circuit Court of Appeals; that court affirmed the permit in August 2007. In July 2008, the EPA Environmental Appeals Board ruled that the issued air permit is valid.

Ownership of the project has shifted over time: Peabody and CMS Energy were co-sponsors of the project, each owning a 15 percent share, but CMS pulled out in May 2007, according to SEC documents filed by the company. A group of Midwestern rural electric cooperatives and municipal power agencies, the Northern Illinois Municipal Power Agency, owns 53% of the project. In July 2007, American Municipal Power Ohio committed to a 300 MW share; in September, 2007, Southern Illinois Power Cooperative committed to a 125 MW share. Construction on the facility began on Oct. 1, 2007.

Prairie Power Inc. (PPI), which is seeking financing for an 8.2 percent share in the plant, was turned away by the Rural Utilities Service when the agency issued a moratorium on new loans for coal-fired power plants in early 2008. In October, a spokesman for the full project said that PPI found financing elsewhere. Lyndon Gabbert, vice president of finance and accounting for Prairie Power, refused to comment on the status of the project's financing, saying only, "The press has a vendetta against this industry."

As of April 2010, construction on the plant is ongoing. Debate over the plant continues during its construction, with local communities and environmental groups still voicing opposition. When completed, Prairie State will cost over $4 billion and will release CO2 into the atmosphere since its construction permit does not regulate CO2 emissions. It will supply wholesale power to Farmers Mutual Electric members. The cost of the plant will be passed on to ratepayers.

In July 2010, Geneva Mayor Kevin Burns told the Chicago Tribune he recently ordered his staff to study whether the city can limit paying for the project's increasing costs. The communities are locked into 28-year contracts that will require higher electricity rates to cover the construction overruns. One indication of how rates might rise is in 2009 files from the Illinois Municipal Electric Agency (IMEA), an association of 33 cities that owns a 15 percent stake in the plant, including Naperville, St. Charles, and Winnetka. The agency predicted its electric delivery rates to member communities will increase to $63.40 a megawatt hour in 2013, up 30 percent from 2007. Agency officials attribute the rate increase to their investment in the Illinois project and a smaller, less expensive coal plant in Kentucky.

In July 2010, to address mounting construction costs and without providing details of the new agreement, the management company in charge of overseeing the plant, Prairie State Generating Co., said it had brokered a new deal capping the construction budget at "approximately $4 billion," below the projected costs of $4.4 billion. That amount does not include the project's total costs, including nearby coal reserves, mine development and transmission lines.

The plant is being financed by Bank of America, Citibank, Credit Suisse, JP Morgan Chase, Morgan Stanley, and Wells Fargo.

Site of plant on earthquake fault lines
The plant is being built between the Wabash seismic and New Madrid fault lines, site of the 'Big Shake' of 1811: "when the largest earthquake in U.S. history in nearby New Madrid, Missouri, altered the very waterways that will feed into the Peabody mine-mouth operation," according to author Jeff Biggers. A report published in Nature magazine in 2005, and conferred with a U.S. Geological Survey, found there is a 90 percent chance that a magnitude 6 or 7 earthquake will occur in the New Madrid seismic area within the next ﬁfty years, raising concerns of plant damage and contamination.

Project Details
Sponsor: Peabody Energy Location: Lively Grove, Illinois Size: 1600 MW (two 800 MW units) Type: Supercritical Projected in service: 2011-12 Status: In construction

Financing

 * Bank of America
 * Citibank
 * JP Morgan Chase
 * Morgan Stanley
 * Credit Suisse
 * Wells Fargo

Citizen Groups

 * Valley Watch, contact [at] valleywatch.net
 * Illinois Sierra Club, Bruce Nilles, bruce.nilles [at] sierraclub.org
 * Missouri Sierra Club, missouri.chapter [at] sierraclub.org
 * Respiratory Health Association of Metropolitan Chicago, Brian Urbaszewski, burbaszewski [at] lungchicago.org
 * American Bottom Conservancy, Kathy Andria

Related SourceWatch Articles

 * Coal plant litigation
 * Carbon Capture and Storage
 * Existing U.S. Coal Plants
 * US proposed coal plants (both active and cancelled)
 * Coal plants cancelled in 2007
 * Coal plants cancelled in 2008
 * Illinois and coal
 * State-by-state guide to information on coal in the United States (or click on the map)